Trusted Brand 2016 Inc. ('Trusted Brand' or the 'Corporation') (TSX VENTURE: HAH.P), a capital pool corporation, is pleased to announce that it has entered into a definitive share purchase agreement subject to the usual conditions (the 'Definitive Agreement') with 1421526 Alberta Ltd. ('1421526'), Lui Holdings Corporation ('Lui Holdings') and 991799 Alberta Ltd. ('991799'), all private Alberta corporations, dated June 19, 2020 pursuant to which Trusted Brand will acquire all of the issued and outstanding Class 'A' common voting shares in the capital of 1421526 together with all of the shareholder loans on a converted to equity basis (collectively the 'Shareholder Interest') for a total purchase price equal to the aggregate of the fair market value of the Shareholder Interest, being $11,328,422.71 (the 'Transaction').
Ben Lui has controlling interest of Lui Holdings and resides in Edmonton, Alberta and Ed Chong has controlling interest of 991799 and resides in Sherwood Park, Alberta. The Transaction is an arm's-length transaction and will constitute Trusted Brand's 'Qualifying Transaction' pursuant to TSX Venture Exchange Policy 2.4. There are no relationships between any Non-Arm's Length Party of Trusted Brand or 1421526 and as such the Transaction is not considered a Non-Arm's Length Qualifying Transaction and therefore does not require shareholder approval. The resulting issuer will be the Corporation, which will be renamed to Yorkton Equity Group Inc. upon completion of the Transaction and will trade under the ticker symbol 'YEG' on the TSX Venture Exchange.
The 1421526 shareholder loans are with each of Lui Holdings and 991799 (collectively the '1421526 Shareholders') in the amount of $3,457,206.68 and $498,635.00, respectively, for an aggregate amount of $3,955,841.68 which will be paid by way of 19,779,208.40 preferred shares in the capital of the Corporation to be issued as Series II ('Series II Preferred Shares'), with a fair market value of $0.20 per Series II Preferred Share, to the 1421526 Shareholders on closing. The Series II Preferred Shares will be exchangeable on a one-to-one basis into common shares of the Corporation ('Common Shares'), subject to approval of the TSX Venture Exchange based on appropriate share distribution being satisfied.
About 1421526 Alberta Ltd.
1421526 is the owner of a two storey retail and commercial building referred to as Pacific Rim Mall located at 9700 - 105th Avenue NW, Edmonton, Alberta which is situated on a 26,400 square foot land base, and a 34,845 square foot gravel parking lot along 98th Street and 105th Avenue in Edmonton, Alberta which is zoned for future development (the 'Property'). 1421526 is an Alberta corporation incorporated under the Business Corporations Act (Alberta) on August 25, 2008, with its principal offices located at 3165, 10180 - 101 Street, Edmonton, T5J 3S4 and its registered office located at 1700, 10175-101 Street NW, Edmonton, Alberta, T5J 0H3. 1421526 has no corporate subsidiaries.
In conjunction with, or prior to, the Transaction, 1421526 will complete a non-brokered private placement of up to 2,500,000 units ('Units'), at an offering price of $0.20 per Unit, for gross proceeds of up to $500,000. Each Unit shall be comprised of one (1) Common Share and one (1) Common Share purchase warrant ('Warrant'). Each Warrant entitles the holder to purchase one (1) additional Common Share at a price of $0.30 per Common Share for a period of three (3) years following the date of closing (the 'Term'). In the event the Common Shares close at a price of equal to or greater than $0.50 per Common Share for a period of greater than twenty (20) consecutive trading days, then the Term of the Warrants shall be automatically accelerated and shortened from three (3) years to thirty (30) calendar days following the date a press release is issued by the Corporation announcing the reduced Term, and the issuance of the press release shall be deemed sufficient notice to all Warrant holders of the shortened Term as a result of the acceleration. The proceeds from the private placement will be used for general working capital. Effective on the close of the Transaction and pending approval of the TSX Venture Exchange, all of Trusted Brand's existing 396,290 stock options to acquire Common Shares will be re-priced and will entitle the holders thereof to acquire an aggregate of 396,290 Common Shares at an exercise price of $0.15 per Common Share for a period of 12 months following the closing of the Transactions. The resulting issuer will issue an additional total of 750,000 options to its officers, directors and employees at an exercise price of $0.20 per Common Share immediately following the closing of the proposed Qualifying Transaction. Additionally, an aggregate of up to 1,819,200 Common Shares may be transferred from the current directors of Trusted Brand to 1421526 (or its assignees) at a purchase price of $0.20 per Common Share subject to an existing escrow agreement of Trusted Brand. To the knowledge of the Corporation there will be no securities issued as a result of the Qualifying Transaction which will be subject to resale restrictions. Trading of the Common Shares was suspended on December 10, 2018 for failing to complete its qualifying transaction within the required twenty-four (24) month period in accordance with TSX Venture Exchange policies. The resulting issuer intends to apply for listing as a Tier 1 Real Estate issuer. A general policy of the TSXV requires that a sponsor be retained to prepare a sponsor report in compliance with TSXV Policy 2.2. It is expected that application will be made for a waiver of the sponsorship requirement, though there can be no assurance that a waiver request will be granted.
Directors and Officers
The board of directors of Trusted Brand currently consists of Ted Geier, Karen Stewart, Perla Woo and Robert Libin. It is intended that the board of directors of the Corporation following completion of the Transaction will be Ben Lui, Evan Chan, Bill Smith, Mark Wilbert and Jason Theiss. Ben Lui is the sole director and officer of 1421526 and a 90% shareholder, indirectly, of 1421526.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This news release includes certain 'forward-looking statements' under applicable Canadian securities legislation. forward-looking statements include, but are not limited to, statements with respect to the future business and operations of Trusted Brand and the anticipated closing of its Qualifying Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties and the delay or failure to receive applicable board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. These forward-looking statements are made as of the date hereof and Trusted Brand disclaims any intent {E8664289.DOCX; 2}5 or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
Contact:
Tel: 403.252.3616.
TRUSTED BRAND 2016 INC 